So you may have heard from a friend or a former schoolmate that consolidating your student loans may be a great option for you to help with your student loans Well today we are going to take a moment to deal with the question: “why is consolidating student loans good?
”There are many benefits to consolidating your student loans.
Consolidating multiple credit accounts into one new loan with a single payment may help you lower your overall monthly expenses, increase your cash flow, and eliminate the stress of multiple monthly payments.
When you're choosing the term of a loan, consider the total amount of interest and fees you’ll pay.
Finding out why consolidating student loans is good.
You can consolidate all, just some, or even just one of your student loans.
Consolidating multiple loans means you'll have a single payment each month for that combined debt but it may not reduce or pay your debt off sooner.
By understanding how consolidating your debt benefits you, you'll be in a better position to decide if it is the right option for you.
A loan must be a federal loan to qualify, private student loans will not qualify for student loan forgiveness.Depending on what type of student loan you have, your interest rate can be over 8% for just one loan.Parent PLUS loans generally have higher interests of about 8.25%.Still by student loan consolidation you can get a weighted average interest rate which is somewhat lower than a normal interest rate.Also, some servicers will allow you to have a lower interest by you opting into a auto payment plan. Student loan default can be a real serious matter if not addressed, Default happens when a borrower has when over 270 days without making a payment.A loan with a longer term may have a lower monthly payment, but it can also significantly increase how much you pay over the life of the loan.